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California legislature passes renewable portfolio standard

Bychris
on
Tue, 03/29/2011 - 17:12

Even though California’s utilities have been scrambling to add in more solar, wind, geothermal and other forms of renewable energy to meet the state’s renewable portfolio standard—which requires utilities to source 33 percent of their power from renewables by 2020—they haven’t been required to by an actual law, until today.

Today, March 29, California’s Assembly passed S.B. 2, which if signed into law by Gov. Jerry Brown (D), would make it a law. And given California’s status as a bellwether state, the passage could have larger implications for the U.S. solar industry.

Utilities have been adding in huge amounts of solar, with projects like the 370-megawatt Ivanpah Solar Electric Generating System and the 250 megawatts of photovoltaics that will soon be on warehouse rooftops near Los Angeles. But right now they’re only required to do so under former Gov. Arnold Schwarzenegger’s executive order, which utilities could contest.

“Actually, codifying it and requiring it is different than an aspiration and an executive order,” said Abound Solar Vice President of Marketing Russ Kanjorski.

“We’re still an emerging company with small production capacity,” Kanjorski said. Right now, Abound’s working on producing panels for projects up to 5 megawatts to 6 MWs, he said. But by 2013 or 2014, Abound could be ready to produce modules for large-scale projects.

“Having a clear, state-mandated standard that everyone has to live up to is important. It gives people time to plan. If you have a program that is on a much larger scale, it gives stability to people’s planning cycles and the market,” Kanjorski said.

Given the size of California, it’s the most populous state in the country, laws passed there have ripple effects across the country.

“When you have that proportion of country moving ahead like that, and it shows that it can be done and done cost-effectively, it certainly shows others the way,” Kanjorski said.

Still, the federal government’s inability to enact a national renewable standard remains a thorn in the side of renewables, even as it’s poised to become the world’s largest solar market.

The investment tax credit, which was extended through the end of 2011, is an important incentive for renewable project developers. “But it’s of very short duration,” Kanjorski said. “That kind of boom bust, on and off, is not helpful to make people make big investments in factories that have long repayment periods.”

To make renewables and solar a more stable market in the U.S. will require some additional steps, according to Kanjorski.

“One of the areas where the U.S. lags Europe is the efficiency of installing renewables. It’s very clean and simple there,” he said. “In the U.S., you’re usually looking at power-purchase agreements, equity and finance. We spend a lot of time and money developing proposals. That’s an added cost to doing a solar or wind project that doesn’t need to be there.”